Curve Hands Its Risk Mandate To Two Resupply Developers

§ 01 Executive Snapshot

• What: Curve DAO approved yRisk as the new risk provider for crvUSD and Llamalend, replacing LlamaRisk.
• Who: yRisk, Curve DAO, and LlamaRisk.
• Why it matters: This decision impacts the risk management of Curve's protocols and the stability of crvUSD and Llamalend following the previous exploit incident.

§ 02 Key Developments

• yRisk was selected through a voting process that ran from Aug. 10 to Aug. 17, with a total of 536,968,660.7 veCRV votes in favor and none against during the temp check.
• The binding vote for Proposal 1492 closed on Sept. 2 with 621,165,847.95 veCRV in favor and only 5.33 against, executing 87 minutes later.
• yRisk's compensation includes 125,000 frxUSD and 568,181 CRV, with the CRV portion valued at approximately $209,000 due to a 78% price increase over the past 30 days.

§ 03 Strategic Context

• The selection process for yRisk followed LlamaRisk's early exit from its contract, which was originally renewed for a year but ended ten months early due to structural changes in their engagement.
• yRisk's appointment comes at a time when Curve's protocols are expanding, necessitating robust risk management to prevent incidents like the $9.6 million exploit earlier this year.

§ 04 Strategic Implications

• The immediate implication is the transition to a new risk management team, which could affect the operational stability of crvUSD and Llamalend.
• Long-term, the performance and effectiveness of yRisk will be closely monitored, and their ability to manage increased responsibilities will be critical as Curve expands its market offerings.

§ 05 Risks & Constraints

• There are concerns about yRisk's capacity to handle the dual responsibilities of risk management and the fast-paced development of new markets given they are a small team.
• The historical exploit incident raises concerns about the potential for future vulnerabilities if risk management is not adequately supported.

§ 06 Watchlist / Forward Signals

• The initial mandate for yRisk will include a public review checkpoint to assess their performance before any expansion of their role.
• Monitoring the performance of crvUSD and Llamalend, particularly in terms of incident reports and market stability, will signal the effectiveness of yRisk's risk management efforts.